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Truth? So what drove Wallace to admit tax dodge?

MICK WALLACE'S claim that he came clean on his dodgy tax affairs lay in ruins today.

It has emerged that the Wexford TD only confessed that his company underpaid €1.4m in VAT after the taxman announced the launch of an intensive probe.

In a fresh twist in the tax cheat saga, new details released by the Revenue Commissioners appear to pour cold water on the ex-developer's claims that he "went to them" and "opened our books".

The State body has revealed that its investigation into M&J Wallace Ltd was classed as a "prompted qualified disclosure" -- meaning his so-called 'confession' came only after he was told his firm was being audited.

Sources today described the revelation as "damning" -- as they strongly indicate that Mr Wallace only admitted his tax evasion as it was becoming more and more clear that he would be caught.

The news is set to be seized upon by the many TDs calling for Mr Wallace's resignation -- and will greatly damage his case in the eyes of the Oireachtas Committee tasked with investigating the scandal.

But the revelation by Revenue that its audit was called before Mr Wallace admitted the underpayment suggests a raft of contradictions in his interviews last week.

In his most blatant statement about his negotiations with Revenue officials, Mr Wallace told RTE's Bryan Dobson on Thursday: "I put myself forward and gave the information. They didn't find out the discrepancy."

He also said in an interview that he "went to them", adding "They didn't discover it."

And on the morning details of his tax evasion broke, Mr Wallace told RTE's Morning Ireland programme: "I thought I could save the company and pay my VAT the following year but obviously when I felt that that prognosis wasn't going to work, I made my declaration to the Revenue. The Revenue came in then and examined all our books ... "

Mr Wallace did not respond to queries from the Herald today.